Ask ten people what “retirement planning” means and you’ll get ten different answers. Some think it’s just maxing out an RRSP. Some think it’s a number — “I need two million dollars.” Some honestly think it’s something you deal with at 60, not 40.
None of those are wrong exactly. They’re just incomplete. Real retirement planning is simpler than most of the noise around it makes it sound, and I want to walk through it the way I’d explain it to a client sitting across from me — no jargon, no fear tactics, just how the pieces fit together.
What retirement planning actually is
At its core, retirement planning answers one question: when you stop working, where does your income come from, and will there be enough of it?
That’s it. Everything else — RRSPs, TFSAs, pensions, investments, insurance — is just machinery built to answer that one question. The mistake people make is treating the machinery as the goal. Buying an RRSP because “you’re supposed to” isn’t a plan. Knowing roughly what you’ll need each month in retirement, and which accounts will produce it, is.
The four pieces almost everyone in Canada has to work with
RRSPs. Money goes in before tax, grows tax-deferred, and gets taxed when you take it out — ideally in retirement, when your income (and tax rate) is usually lower. For 2026, the contribution limit is $33,810, though your personal room depends on your income and any unused room carried forward from previous years.
TFSAs. The opposite setup — you contribute after-tax money, but everything inside grows completely tax-free, including when you withdraw it. The 2026 annual limit is $7,000, and if you’ve never contributed and have been eligible since 2009, your lifetime room is up to $109,000. For retirement income, this matters because TFSA withdrawals don’t count as income — so they don’t affect things like the OAS clawback, which we’ll get to.
CPP. The Canada Pension Plan pays out based on what you contributed while working. The maximum monthly amount at 65 in 2026 is $1,507.65, but most people get less than the max — it depends on your contribution history. You can also start CPP as early as 60 (at a permanent reduction) or delay it to 70 (at a permanent increase), and that one decision alone can shift your retirement income by a meaningful amount over a long retirement.
OAS. Old Age Security is a separate government benefit, not tied to your work history the way CPP is — it’s based on how long you’ve lived in Canada. In early 2026 it pays up to $742.31 a month at 65–74, and $816.54 from 75 onward. The catch: if your net income in retirement climbs past $95,323, the government starts clawing OAS back, and it’s fully gone by $154,708. This is one of the more overlooked pieces of retirement planning — a retirement income that looks great on paper can quietly trigger a clawback nobody planned for.
If you own a business or a professional corporation, there’s a fifth piece
RRSPs and TFSAs are built for employees drawing a T4 salary. If you’re incorporated — a physician, a dentist, a business owner running things through a corporation — you likely have a different lever available: money left inside the corporation, invested and taxed at the corporate rate, then paid out to you later as dividends.
Whether that’s better than pulling more out personally to fund an RRSP isn’t a yes-or-no question — it depends on your corporate tax rate, your personal tax bracket in retirement, how much you need to live on today, and what else you’re funding along the way (a mortgage, kids’ education, a second property). This is exactly the kind of decision that benefits from sitting down and running the actual numbers rather than following a rule of thumb from a podcast. We’ve written more on the salary-vs-dividends question and on holding companies if you want to go deeper on that specific piece.
So how much do you actually need?
I’m going to disappoint you here: there’s no single number, and anyone who gives you one without knowing your life is guessing. What actually drives the number is your expected spending in retirement — not your income today. A household spending $6,000 a month needs a very different pool of capital than one spending $12,000 a month, regardless of what either of them earned while working.
A reasonable starting exercise: write down what you actually spend now, subtract anything that disappears in retirement (a mortgage that’ll be paid off, commuting costs, contributions to accounts you won’t be funding anymore), and add anything that shows up new (travel, health costs, more time for hobbies that cost money). That number, multiplied by roughly 25, is a common rough starting point for how much invested capital might be needed to sustain it — but it’s a starting point for a conversation, not a target to hit blindly.
The mistakes I see most often
Starting the RRSP-vs-TFSA-vs-corporation decision from scratch every year, instead of having an actual order of operations that fits their situation. Taking CPP at 60 out of habit or nervousness, without running what delaying it would actually be worth over a 25-30 year retirement. Not accounting for the OAS clawback until the year it happens, at which point it’s too late to plan around it. And the quiet one: assuming “the business” is the retirement plan, with no real strategy for turning business or practice value into personal retirement income when the time comes.
None of these are failures of intelligence. They’re just what happens when retirement planning gets treated as a once-a-year RRSP-season chore instead of an ongoing plan.
Where to start this week
You don’t need a full financial plan to take the first useful step. Pull your latest CPP statement from your My Service Canada Account, so you know roughly what you’re actually on track to receive — most people have never looked at this. Add up what you’re currently spending in a typical month. And if you’re incorporated, take five minutes to check what’s sitting in retained earnings versus what’s in your personal RRSP and TFSA room.
From there, the real value of working with a planner isn’t handing you a generic checklist — it’s building the specific order of operations for your income, your corporation (if you have one), and the retirement you’re actually picturing.
If you’d like help putting the pieces together, a free consultation is a good place to start. Book a time here, or read more about retirement and exit planning for business owners.
This article is for general educational purposes and does not constitute personalized financial, tax, or legal advice. Figures cited (RRSP, TFSA, CPP, and OAS amounts) are 2026 figures and are subject to change — individual circumstances vary, so speak with a qualified advisor before making decisions based on this information.
